Sources of Corporate Finance — Secretarial Practice STD 12 Commerce / Arts — Question
Maharashtra BoardEnglish MediumSTD 12 Commerce / ArtsSecretarial PracticeSources of Corporate Finance4 Marks
Question
Trade credit is not a cash loan.
✓
Answer
Trade credit is a business-to-business agreement wherein there is an arrangement to purchase goods and services on credit and pays at a later date and not immediately.
The credit period extends up to a month.
Discount is given if the same is paid earlier.
It is an interest-free loan given by one businessman to another.
It does not involve loan formalities but only a trade transaction. Hence, not a cash loan.
Thus, it is rightly said, that the trade credit is not a cash loan.
Need a full question paper?
Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.